VERDICT: The GT is proof that it is possible to build a 4WD wagon with outstanding on-road dynamics and performance.

RATING: Four stars (out of 5)

Subaru must be a fun place for an engineer to work. Counterparts at many other Japanese outfits seek small-car inspiration playing with updates of the conventional 1.6- and 2.0-litre front-drive hatch and sedan formulae - but the Subaru whitecoats get to play with altogether more challenging stuff.

A prime example is the new Forester GT. Imagine the canteen conversations which led to its development ... "So, we've got the Forester. Nice thing, but a bit more oompah under the bonnet wouldn't go astray. We could bolt on a turbo. Hey, we've got one in the Impreza WRX. (Big grins all round.) Let's do it."

The Forester GT has no reason to exist other than the fact that it's a great idea: take the all-wheel-drive Forester, instal a detuned WRX 2.0-litre turbo-charged engine, and create the first genuine sports 4WD wagon.

Priced at $36,990, the Forester GT costs $10,000 more than the naturally aspirated 2.0-litre version. The turbo flat four produces considerably less peak power than the WRX (125 kW as against 160 kW), but a smaller turbo impeller and housing also creates higher boost pressure at lower engine speeds, giving a wider spread of torque to suit the GT's less frenetic purpose.

A five-speed manual transmission is standard (but it lacks low range), and power goes to the road through Subaru's now universal all-wheel-drive, which uses a viscous centre differential. Retaining the Forester's 200 mm ground clearance, the GT will handle all but the most tortuous rocky terrain.

The GT's wide, strong surge of turbo thrust is enjoyably sporty, but more manageable than the WRX - which does little until it goes berserk at 3,000 rpm. The GT is a little flat just off idle, but the turbo starts to contribute by 1,500 rpm and around town provides enough flexibility to be easy to drive, though its throttle response in the lower gears can be slightly jerky.

Rapid acceleration still begins at 3,000; the GT sprints from 0-100 km/h in 9.1 seconds - quickest in the class by far, but not quick enough to keep a WRX (which takes a supercar-like 6.0 seconds) in sight. Relatively noisy and coarse at idle and when taking off, the engine becomes acceptably smooth and quiet once the forced induction takes over and you reach the higher gears.

The manual gearbox is light and precise, as is the clutch, and the AWD ensures that traction is secure whatever the road or weather conditions.

Distributing drive to all wheels is also the basis of the GT's outstanding dynamics. The GT handles and steers better than some so-called sports cars, with finely controlled independent suspension delivering great balance and stability. The steering is superb - point the GT and there it goes - while the anti-lock brakes are equally impressive, with plenty of feel at the pedal and great stopping power when required.

Four-wheel-drive tyres usually are not noted for grip; the Geolandars, however, are an exception, and involve no significant compromise to the GT's high handling limits.

On a dirt road the GT is one of the most enjoyable cars Drive has tested. It is untroubled by corrugations and can be driven almost as confidently as on bitumen. The ABS has been modified to produce less aggressive intervention on gravel surfaces, so that stopping distances are shorter.

Ride comfort is also outstanding; the GT is less supple than a large 4WD wagon, but superior to most small medium sedans in its compliance and bump-absorbing qualities.

The front seats are comfortable, generously bolstered, pseudo sports chairs, with front and rear cushion tilt and plenty of fore-aft travel. The large wheel is a bit out of place in the GT, but it is height adjustable. Occupants sit quite high, with clear vision all around.

Wide-opening doors and the high roof afford easy access and generous headroom, but tall passengers in the back will find leg room a bit tight, especially in comparison with Honda's CRV. The seat is reasonably comfortable, but is uncontoured and has only a lap belt in the centre. Three child restraint anchors are located in the roof.

Built and finished to the highest quality standards, the GT feels exceptionally tight and solid. The cabin is attractively trimmed, with storage bins, cup-holders and pockets everywhere.

The Forester's load area is also smaller than the Honda's, but the back seat is split 60/40 and easily folds flat for an extended floor. A plastic bin under the floor is useful for wet items, and there are two shopping bag hooks and a 12-volt power outlet.

Less useful in the bush than its naturally aspirated stablemate, the GT more than compensates for its lack of low range with enhanced on-road ability.

Subaru's decision to give Forester the WRX treatment has produced a unique result: a small-medium 4WD wagon which stops, goes and handles like a good sports sedan.

This is achieved because the two donor cars are themselves class leaders. The marketers contributed the GT badge; the rest is extremely clever engineering.